Waimea Plains: economics of freshwater quantity management

The Waimea Plains (Tasman District, New Zealand) is a major horticulture area, highly reliant
on irrigation. Irrigators draw water from an integrated surface water and groundwater system.
Fresh water is over-allocated by 64%. Irrigators face significant restrictions due to natural
fluctuations in river flow and groundwater levels, i.e. water is unreliable.
This case study evaluates different options to address these problems. A catchment
optimisation model is used to assess the benefits from enabling water permit transfers and
from the proposed Waimea Community Dam (‘the dam’). A spreadsheet model is used to
assess the impact of different ways of cutting back water permits, should the dam not go
ahead. The case study is based on farm- and orchard-level models which estimate irrigation
need, profit and nitrogen leaching under different levels of water allocation, reliability and soil
type for apples, viticulture, market gardening and dairy farming over a period of 40 years.
Key findings are that:
• water permit transfers would result in moderate benefits on average (8.6% increase
in average profit) but significant benefits in dry years (46% increase in profit);
• the dam would result in significant benefits by enabling expansion of irrigated areas
and conversion from unirrigated pasture to higher value crops, and providing a
reliable water supply for existing and future irrigators (103% increase in average
profit and 10% decrease in nitrogen leaching).
• Should the dam not go ahead, water permit cuts based on irrigation need would
result in lower, and a more even distribution of, costs than flat-rate cuts.